D.C. Circuit Orders FCC to Reallocate Western TV Stations to New York, Philadelphia Markets

The result was what the broadcaster wanted. “Given the Commission’s concession that PMCM’s proposal is technically feasible, we reverse and remand to the Commission with instructions to approve the reallocations,” Tatel wrote for the three-judge D.C. Circuit panel (http://xrl.us/bn6izd). Broadcast lawyers said the bottom line is that PMCM may not have to go through an auction to move KJWY, affiliated with Weigel Broadcasting’s MeTV network, to Wilmington, Del., and keep its Channel 3 location and shift to Middletown Township, N.J., on its channel 2 position Valcom’s My Family TV affiliate KVNV.

That leaves two fewer VHF channels with which the FCC can move other stations in No. 1 market New York and No. 4 Philadelphia from UHF, if they agree to the relocation as part of a repacking of TV frequencies before the agency holds a voluntary broadcast incentive auction, industry officials noted. PMCM, which filed the community-of-license change amid the full-power DTV transition in June 2009, hadn’t expected there to be an auction, said CEO Bob McAllan. The incentive auction, which the commission this year got congressional permission to hold through February’s spectrum law, has been considered by the company, he said. For now, it wants to move the stations and start broadcasting, he said.

PMCM is “already making plans” to move the two Western stations, and continues to be willing to keep its Nevada and Wyoming operations in place after it moves east so the commission can allocate the licenses to another broadcaster, said McAllan. He’s also CEO of Press Communications, owner of a half-dozen radio stations in New Jersey. “If the commission deems so, there would be no loss of service” in the two smaller markets, where KVNV and KJWY plan to move from, McAllan said. It might take a year to 18 months for PMCM to build a studio, transmitter and other facilities to begin broadcasting from New Jersey into the New York market and Wilmington into the Philadelphia market, he said. “Most of what we had lined up no longer exists” in terms of equipment eyed in 2009 when the community-of-license changes were requested, he said. New programming deals would need to be struck, McAllan said: “We never in our wildest dreams anticipated that we'd be here three years later” without a reallottment.

The rare move was designed to take advantage of a statute requiring every state to have a commercial, full-power VHF channel, which was no longer the case after slot changes from the DTV transition for Delaware and New Jersey, industry attorneys said when PMCM made the request. “Unlike when section 331(a) was enacted, the digital transition made it technically feasible to allocate new VHF channels to New Jersey and Delaware on vacated airwaves without creating signal interference,” when those states were left without commercial VHF outlets because those in that part of the TV band moved to other allotments, Tatel wrote. “Within days of the digital transition and setting the stage for the case before us, PMCM” made its proposal, he said. “Although acknowledging that both moves could be accomplished without creating signal interference, the Bureau found that the proposed moves were not ‘reallocations’ within the meaning of section 331(a)’s second sentence.” After the Media Bureau denied PMCM’s request in 2009, it moved to hold an auction of Channel 4 in Atlantic City and Channel 5 in Seaford, Del., where the bureau choose to put new stations to comply with Section 331 (CD Feb 5/10 p12). There was little interest in those allocations, and they'll still stand after the D.C. Circuit’s move, McAllan and his lawyer said.

The FCC “remains fully committed to carrying out all of its obligations concerning the allocation of VHF television stations,” a commission spokesman said. The agency’s interpretation of reallocation as a move to an adjacent location didn’t fly with the D.C. Circuit. How to proceed was “unusually challenging here because Congress held no hearings on section 331(a), passed it as a rider to an unrelated tax bill, and used language we have found cannot be interpreted literally” in Multi-State Communications v. FCC in 1984 where the court found the statute “displaced” normal allotment procedures, Tatel wrote last week. FCC and PMCM “differing interpretations suffer from insurmountable problems,” so the three judges made their own interpretation of the 1982 law in the context of the Communications Act. “Interpreted this way, section 331(a) fulfills congressional intent: it ensures that every State will have a VHF station so long as that goal can be accomplished without causing signal interference. This is the best interpretation of section 331(a) because it reads the two sentences as a coherent whole and is consistent with the basic purpose of the Communications Act."

"This is really unprecedented,” said TV-station lawyer Melodie Virtue of Garvey Schubert, not part of this case. “It just raises all kinds of issues, do people need to be able to compete” for such a reallocation in a normal auction, she asked of the ruling she said was a narrow one. “Obviously they don’t want to” grant the community change without an auction in markets where “they want the spectrum and it’s already congested,” Virtue said. PMCM didn’t technically file applications for KVNV and KJWY in the 2009 Form 302 requests (http://bit.ly/VG2deO, http://bit.ly/W6NI9u), so “the procedures involved here are a little unusual,” said Fletcher Heald communications lawyer Don Evans, who represented the company at October oral argument in the case. Those forms give the FCC “the technical information needed to create a new license in the new state,” Evans said. “Because of the unusual automatic reallocation feature of Section 331, there should be no further community of license change proceedings -- the reallocation of the license and the change in the table of allotments occur by operation of the statute without further ado. There is certainly no auction since the license will already have been granted and reallocated, and there’s no need for public comment.”